What is the procedure for accounting and deducting VAT during the construction of fixed assets?

In this article we will look at VAT on the construction of fixed assets. We will learn about the procedure for accounting for VAT during construction, VAT deductions during construction in 2022. We will analyze the procedure for issuing invoices.

The procedure for reflecting VAT during the construction of fixed assets has its own characteristics. The tax accounting mechanism and the specifics of obtaining a tax deduction depend on many factors: how the construction was carried out - economic or contract, how the object was handed over - at one time or in stages, etc. Today we will understand the features of VAT accounting during the construction of OS and provide answers to common questions on the topic.

The procedure for calculating VAT during construction and installation works

To calculate VAT when performing construction and installation work for the taxpayer’s own consumption, the following steps are performed sequentially:

1. The tax base for completed construction and installation works is calculated.
2. The tax period in which VAT must be calculated and the tax amount must be calculated is determined.
3. An invoice is drawn up for the cost of construction and installation work performed.
4. The amount of VAT on purchased materials, works, services necessary to carry out construction and installation work, and the amount of VAT accrued on the volume of construction and installation work performed are subject to deduction.
5. A completed VAT return is submitted to the tax authority.
6. Tax is paid to the budget if the declaration reflects the amount of VAT payable.

EXAMPLE No. 1

In one of the divisions of JSC “Lutik”, shelving for storing finished products was manufactured.

The following entries will be created in the accounting records of JSC Buttercup:

Determination of the tax base for VAT during construction and installation works

The tax base for VAT when performing construction and installation work is determined as the cost of this work. The indicated cost includes all expenses of the taxpayer actually incurred by him during the construction of fixed assets.

If third-party organizations are partially involved in carrying out construction and installation work, then the cost of construction work performed by contractors should not be included in the tax base (see decision of the Supreme Arbitration Court of the Russian Federation dated March 6, 2007 No. 15182/06 and resolution of the Federal Antimonopoly Service of the Ural District dated January 14, 2008 No. Ф09-11071/07-С2). Tax officials also adhere to this position (letter of the Federal Tax Service of Russia dated July 4, 2007 No. ШТ-6-03/527).

EXAMPLE No. 2

A gear crushing machine has been installed in one of the divisions of Lyutik JSC. The installation of the machine was carried out by the organization's employees.

The costs of the department that installed the gear crushing machine include the following cost elements:

- workers' wages;

- deductions from payroll;

-electricity;

- other overhead costs of the workshop.

The above expenses in accounting increase the initial cost of the machine.

According to the All-Russian Classifier of Types of Economic Activities OK 029-2001, the above works do not relate to construction and installation works (installation of equipment has an OKVED code different from the construction and installation work code). As noted in the Resolution of the Federal Antimonopoly Service of the Moscow District dated March 28, 2012 No. A40-10464/11-129-46, “... the main feature that allows defining work as construction and installation work is the execution of construction, of which installation work is a part.”

Installation of equipment outside the scope of construction work does not fall under the definition of “construction and installation work for one’s own consumption.”

Thus, as in example No. 1, the organization does not have the obligation to calculate VAT on the cost of installation of the machine.

One of the criteria for classifying completed work as construction and installation work for one’s own consumption is the work being performed by the organization itself, i.e. employees who are in an employment relationship.

VAT accrual on construction work

VAT when performing construction work for own consumption must be calculated at the end of each tax period (clause 10 of article 167 of the Tax Code of the Russian Federation). Thus, the taxpayer calculates the amount of VAT on a quarterly basis based on the volume of work that was performed during the quarter.

On the last day of the quarter, an invoice is issued in accordance with Art. 163 of the Tax Code of the Russian Federation and clause 21 of the rules for maintaining a sales book, approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137. The document can be drawn up in one copy, since the buyer to whom the second copy should be transferred does not exist as such (clause 6 of the rules for filling out an invoice - invoices approved by Decree of the Government of the Russian Federation dated December 26, 2011 No. 1137). Based on this, in the lines “Seller”, “Consignee and his address”, “Consignor and his address”, “Buyer” it is necessary to enter the details of the taxpayer who carried out the construction work on his own.

An invoice issued in this way is simultaneously registered in the purchase book and the sales book (clauses 3 and 21 of the rules for maintaining a sales book, approved by Decree of the Government of the Russian Federation of December 26, 2011 No. 1137 and paragraph 2 of clause 20 of the rules for maintaining a purchase book, approved by a Government Decree RF dated December 26, 2011 No. 1137).

An example of tax accounting automation in a construction company

In this case, we will consider a case specializing in the construction of residential and non-residential buildings. The management set the task of introducing a convenient accounting system that would make it possible to visually analyze the cost structure and quickly calculate VAT from the contractor.

The BIT.CONSTRUCTION solution from specialists was chosen. It fully met the needs of the enterprise. This is a comprehensive software that allows you to automate several accounting, management and control circuits at once.

In this case, the “Contractor” solution was chosen, which automates the accounting and tax accounting of a contract construction organization in accordance with PBU 2/2008.

began to keep object-by-object records. The efficiency of the accounting department has increased significantly. We managed to automate 5 jobs.

During the implementation of the project, the following tasks were solved:

1. Automation of accounting and tax accounting is provided.
2. Organized accounting of costs and settlements with investors and buyers.
3. The automated generation of industry forms KS-2, KS-3 has been set up.
4. Promptly receive a detailed structure of financial results and costs.
5. Take into account costs based on custom analytics.

What results have you achieved? The system allows employees to quickly collect and analyze information on various elements. The workload on the accounting department has decreased significantly. The program has significantly simplified and speeded up work with accounting and tax reporting. In addition, the likelihood of errors has been significantly reduced due to the elimination of manual entry of large amounts of data.

Do you want to implement automation of accounting and tax reporting in your company? You can get advice from a specialist in your city or write to an online consultant on our website.

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VAT deduction in construction

When carrying out construction and installation work in an economic way, the taxpayer can claim the following amounts of VAT for deduction:

1. VAT paid to suppliers when purchasing materials, works, services used during construction work.
2. VAT paid to the seller of an unfinished capital construction project, subsequently completed using economic methods.
3. VAT, which was accrued when performing construction and installation work for own consumption.

In this case, the VAT amounts specified in clauses 1 and 2 can be deducted as materials, works, services are received and invoices are received from suppliers (letter of the Ministry of Finance of Russia dated September 21, 2007 No. 03-07-10/20, Federal Tax Service Russia in Moscow dated July 22, 2008 No. 19-11/069325). The data on the amount of input VAT on goods (work, services) purchased for construction and installation work, and the amount of tax presented by contractors, are necessary to calculate the indicator on line 120 of section. 3 VAT declaration forms (paragraph 6, clause 38.13 of the procedure for filling out the declaration, approved by order of the Federal Tax Service of Russia dated October 29, 2014 No. ММВ-7-3/ [email protected] ).

It is necessary to deduct VAT, which was accrued on the amount of expenses incurred during the construction of a fixed asset using one’s own resources, on the last day of the tax period at the time the tax base is determined. This procedure for accepting deductions is established in paragraph. 3 paragraph 6 art. 171 and para. 2 clause 5 art. 172 of the Tax Code of the Russian Federation. Thus, VAT on completed construction work can be deducted in the same quarter in which it was accrued for payment to the budget (letter of the Federal Tax Service of Russia dated March 23, 2009 No. ШС-22-3/ [email protected] ). The specified amount of tax must be reflected in the VAT return in lines 060 “Performing construction and installation work for own consumption” section. 3 and 140 “The amount of tax calculated when performing construction and installation work for own consumption, subject to deduction” section. 3 (clauses 38.3 and 38.10 of the Procedure for filling out a tax return for value added tax, approved by order of the Federal Tax Service of Russia dated October 29, 2014 No. ММВ-7-3/ [email protected] ).

See also “The court recognized the work as completed, but there are no invoices for it. Is it possible to deduct VAT?

Seize the moment

Now let’s establish the moment of determining the tax base when performing construction and installation work for one’s own consumption, i.e., the number in the tax period for which it is accrued. It is the last date of each tax period (clause 10 of article 167 of the Tax Code of the Russian Federation). This order remains the same.

The tax base in this case is determined as the cost of construction and installation works, based on the actual expenses of the taxpayer for their implementation. As a general rule, taxpayers-organizations calculate the tax base at the end of each tax period based on data from accounting registers (clause 1 of Article 54 of the Tax Code of the Russian Federation).

In accounting, the accrual of VAT on the cost of construction and installation work performed for one’s own consumption is reflected by the entry: Debit 19-5 “VAT accrued on the cost of construction and installation work performed for one’s own consumption” Credit 68 “Calculations for taxes and fees.”

Example 1

CJSC Kupets operates in the wholesale trade of manufactured goods. In January 2009, the organization began construction of a warehouse for storing goods in an economic way.

At the end of March, construction was completed and the warehouse was put into operation. In the same month, the organization submitted documents for state registration of ownership of the constructed facility. The organization began calculating depreciation on the property in April 2009.

The actual costs of building a warehouse, accumulated in subaccount 08-3 “Construction of fixed assets” of account 08, amounted to 2,139,000 rubles. (see table).

On the cost of work performed by the organization in the first quarter of 2009, VAT must be charged in the amount of RUB 385,020.
[(939,000 rub. + 676,000 rub. + 524,000 rub.) × 18%]. Table. Warehouse construction costs

Results

VAT on the construction of fixed assets is calculated and deducted at the end of each tax period.
The basis for calculating the tax is the costs incurred during the construction campaign. VAT refundable is taken into account in the purchase book as materials and work are received, as well as the necessary documentation is received. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Programs for automating tax accounting

Automation allows you to speed up all business processes. The programs increase productivity and reduce labor costs for managers performing routine operations. When working in the industry, you should use specialized software that not only automates accounting, but also has functionality that reflects industry specifics.

The comprehensive automation system for construction companies BIT.CONSTRUCTION is especially popular. It includes a special module with functions that is intended for customer developers. The system allows:

• calculate VAT on unfinished construction;
• receive advanced analytics on accounts;
• automate tax accounting;
• keep records of purchase and sale agreements.

If you are a contractor who needs to account for VAT in construction, then there is also specialized software for you. It will improve your efficiency. Just use the BIT.CONSTRUCTION/Contractor module. The advantages of this solution include linking completed work and costs to specific construction projects, automatic filling of industry forms, and rapid generation of reports. Work in progress is accounted for item by item, and the cost structure is formed correctly.

VAT by contract method

VAT based on invoices issued by the customer If the customer and the investor are different organizations, the tax deduction is carried out by the investor based on the invoices presented by the customer.

The customer, in turn, draws up invoices based on the documents presented by the contractor.

Clause 6 of Article 171 of the Tax Code establishes that tax amounts presented by contractors and customer-developers when carrying out capital construction work are deducted.

The deduction is carried out in the usual manner on the basis of received invoices after the work has been accepted for accounting. VAT deduction is possible only after the object has been accepted for accounting. Thus, the contractor issues invoices to the customer for its work. Based on them, the customer issues invoices for the investor.

VAT on construction of fixed assets in 2022

Further, Article 753 “Deliverance and acceptance of work” states that the customer begins acceptance of work from the moment he receives a message from the contractor about readiness for handover of the object.

In the event that the customer accepts individual stages of work, the risk of accidental death passes to him if the damage and death did not occur through the fault of the contractor.

Article 746 of the Code establishes the procedure for settlements between the parties, when payment for contract work is made in the amount specified in the estimate and in the manner established by the contract, or, if this is not provided for in the contract, in accordance with the legally established procedure.

Analyzing the norms of civil legislation, we come to the conclusion that either stages of completed work or a finished building after the final completion of capital construction can be transferred under the act.

Procedure for VAT refund during construction

Important Value added tax paid to the seller can be reimbursed in the following way:

• at the time of the transaction under the purchase and sale agreement;
• after completion of construction, commissioning of the asset and depreciation.

When a commercial organization, to complete the construction of fixed assets, involved contracting companies, and also purchased various materials, then VAT will be reimbursed after the first depreciation charges are reflected in the accounting and tax records.

Reimbursement by the investor Commercial organizations that are engaged in various investment projects have the opportunity to reimburse the paid value added tax from the state budget.

What is the procedure for accounting and deducting VAT during the construction of fixed assets?

Experts from the Ministry of Finance recommend that customers, when preparing invoices, separately highlight in the document the cost of construction and installation work for each contractor and the cost of construction materials and goods separately for each supplier.

At the same time, the customer attaches to the invoice transferred to the investor copies of the invoices on the basis of which it was compiled, as well as copies of all primary documents confirming the amounts indicated in the invoices and copies of documents confirming payment of tax amounts to the customs authorities, if any importation of materials or goods into Russia.

copies of the contractor's invoices and primary documents are attached to the invoice. The customer transfers the invoice to the investor once either at the time or within five days after the transfer of the building or other object for which capital construction has been completed to the investor's balance sheet.

VAT for the construction of fixed assets by contract and economic methods

But, if an organization simply made repairs in its office, then these works are not included in the taxation. An organization, having carried out construction and installation works on its own at its own facility which it will use in its activities, can claim the amount of VAT for deduction (clause 5 of Art.

172 Tax Code of the Russian Federation), accrued on the cost of work performed and registered in the purchase book, the basis for this will be the issued invoice. Let's also consider a situation where a company builds a facility for itself under a contract method and engages an individual as a performer under a civil law agreement.

When submitting documents for desk audit, these services were highlighted (debit 08 credit 76). The inspectors demanded that VAT be charged.

VAT during construction - calculation and deduction procedure

Attention: Distribution of risk between the parties” of the Civil Code of the Russian Federation, the contractor bears the risk of accidental loss or accidental damage to a construction project that is the subject of a construction contract until acceptance of this project by the customer.

Article 753 “Delivery and acceptance of work” stipulates that the customer, having received the contractor’s message about the readiness for delivery of the result of the work performed under the construction contract or, if provided for by the contract, the completed stage of work, is obliged to immediately begin accepting it.

The customer, who has previously accepted the result of a separate stage of work, bears the risk of the consequences of death or damage to the result of work, which did not occur through the fault of the contractor. The procedure for payment for work is established by Art. 746 of the Civil Code of the Russian Federation.

VAT deductions for capital construction

One of the options for acquiring fixed assets for an organization is their construction and construction, both economically and through the involvement of contractors.

In a situation where an enterprise erects buildings and structures on its own for further use and independently carries out construction and installation works, the organization is obliged to charge VAT on the cost of work performed at the end of each tax period, or rather each quarter, then issue an invoice and register it in the sales book in accordance with subclause 1.3 clause 1 of article 146 of the Tax Code of the Russian Federation. is included in the VAT tax base at the time of the act of acceptance of the transfer of the object to another person.

VAT contract construction

In accordance with this standard, payment for work performed by the contractor is made by the customer in the amount provided for in the estimate, within the time frame and in the manner established by law or the construction contract. In the absence of appropriate instructions in the law or contract, payment for work is made in accordance with Art.

711 »

Procedure for payment for work" of the Civil Code of the Russian Federation. A construction contract may provide for payment for work at a time and in full after acceptance of the project by the customer. Based on the stated norms of the Civil Code of the Russian Federation, it is concluded that the contractor transfers the work performed under the act either in stages, or after completion of construction of the facility as a whole.

Accordingly, invoices that entitle the investor to deductions are issued either as stages are completed or upon completion of the entire construction.

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